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The California Coordinated Care Initiative – The Managed Care Migration

In the ongoing effort to reform health care, California is in the midst of an enormous transformation of its Medi-Cal program from a largely fee-for-service program into managed care. Managed care is a health care system where a network of providers is paid a lump sum, “capitated” fee for each patient member, regardless of the services the member uses. The providers thereby have an incentive to reduce the costs of care for its members, hopefully by keeping them healthier so they utilize fewer health care services. California is one of dozens of states working to switch some of its Medicaid recipients into managed care.

The California Coordinated Care Initiative (CCI), passed in 2012, will transform California’s Medi-Cal delivery system for low-income aged and persons with disabilities. There are two major parts to this initiative: Cal MediConnect and the Medi-Cal Long Term Supports and Services (LTSS) program. Persons who are dually eligible, i.e., eligible for both Medicare and Medi-Cal, will be a part of the Cal MediConnect three-year demonstration in eight counties and enrolled in one of the Medi-Cal health plans in that county – Alameda, San Mateo, Santa Clara, San Bernardino, Riverside, Los Angeles, Orange, and San Diego. The transition for duals (Cal MediConnect) is slated to begin on January 1, 2014, although the date could be delayed. Beneficiaries are supposed to receive at least three formal notices of the impending changes 90, 60, and 30 days before the enrollment dates. The notices should have information about all of the available choices and phone numbers to call for help. Duals who are already enrolled in Medicare Advantage do not need to make a change. Duals can exclude their Medicare services from a managed care plan, but Medi-Cal services cannot be excluded. A number of fact sheets and information guides are being prepared by various advocacy stakeholder groups, so ample information should be available by the time the enrollment process starts.

Under the Managed Medi-Cal Long Term Supports and Services (LTSS) program, nearly all Medi-Cal beneficiaries will be required to receive all of their Medi-Cal benefits, including long term supports and services and Medicare wrap-around benefits, through a Medi-Cal health plan. Although most Medi-Cal-only beneficiaries are already enrolled in managed care, they will now have to receive their long-term supports and services through their health plan as well. The Managed Medi-Cal Long-Term Supports and Services (LTSS) demonstration will be expanding to the rural counties on September 2013.

Given that there are more than half-a-million Cal MediConnect eligible beneficiaries in the eight affected counties, the transition to managed care promises to be a massive undertaking that may disrupt health care services for thousands of people. Some of these plans will not be prepared to deal with the range of services needed by this vulnerable population. Some beneficiaries may have to find new health care providers if their managed care plan does not include their current providers.

In the long-term care world, the switch to managed care will create some problems. Nursing home residents who are also duals will continue to have a long-term care benefit; however, they may be required to move if their current home is not a participant in the residents’ managed care plan. Obviously, forcing a resident to move from a nursing home may be traumatic, particularly if the resident has been in the home for years. Advocates have raised this issue with the government and been told that nursing home residents may be given a one-year grace period before they are forced to move. Still, we expect that hundreds of residents will eventually be forced to move from their nursing homes due to the managed care shift.

For long-term care consumers who are in a home or community based setting, major changes may be in store. The various managed care plans have discretion on whether to offer home and community based services. On the other hand, dental, vision, and even some transportation services must be covered.

Another major change that managed care promises for long-term care recipients is in estate recovery. As a fee-for-service program, Medi-Cal estate recovery has been limited to the cost of services that a beneficiary has received. Under a managed care program, payments are made regularly on the beneficiaries’ behalf, whether they use services or not. Therefore, beneficiaries who have used Medi-Cal as a safety net for health care, rarely using their benefits, nonetheless face a potentially enormous estate recovery at the time of their death. In other words, estate recovery will no longer necessarily be proportional to the benefits received, but will consist of the total payments made to the managed care plan.

With the huge number of affected beneficiaries and the patchwork of service provision in California, the transition will likely be problematic.

Some organizations that can assist beneficiaries with questions are:
HICAP 800-434-0222

Health Consumer Alliance

Disability Rights California

Medi-Cal Managed Care Office of the Ombudsman 888-452-8609

Department of Managed Health Care 888-466-2219.

For updates on implementation of the Coordinated Care Initiative, see
Stay tuned at for news about the managed care migration and what it means for long-term care.

Page Last Modified: July 8, 2014